Retailers decide earlier is better for holiday sales

The Auburn Mall was already decked out for the winter holidays last week.

Black Friday used to be a shopping day for early birds, but this year the night owls are taking over the party.

Just-after-midnight store openings will be widespread in Massachusetts on Friday as retailers vie for shoppers' dollars. Chains and malls that previously confined their openings to the pre-dawn hours of 5 a.m. will instead unlock doors earlier, setting off a day of shopping that is expected to make the 2012 holiday season modestly more lucrative for retailers than last year's season.

“This is the earliest we've opened in Massachusetts,” said Bill Wertz, East Coast spokesman for Wal-Mart Stores Inc., which will open stores at 1 a.m. Friday. “We're doing a lot of work even now to get ready, get the goods on the shelf, in some cases behind the counter or under wrap. I think everything points to a lot of customer enthusiasm.”

Enthusiasm matters because the winter holiday shopping season, and notably the day after Thanksgiving that is known as Black Friday, are critical opportunities for retailers to ring up sales. Last year, holiday spending represented nearly 20 percent of annual retail sales, according to U.S. Commerce Department data.

The National Retail Federation, a trade group, projects that U.S. retail spending in November and December this year will hit $586.1 billion, up 4.1 percent over the same period last year. The Retailers Association of Massachusetts expects holiday sales in the state, typically about $14 billion, to rise 3.5 percent over last year.

“We're looking good,” said association President Jon B. Hurst. “I wouldn't be surprised if we close the books at the end of December a little above that because the calendar is so favorable.”

ShopperTrak, a firm that calculates retail foot traffic, expects Friday will be the biggest day of the season for sales and foot traffic. Last year, ShopperTrak reported, Black Friday retail purchases totaled $11.4 billion, up 6.6 percent over 2010 and the largest dollar amount ever spent on that day.

This year, more retailers and malls are pushing Black Friday openings to just after midnight. That's as early as most can legally open, because Massachusetts “blue laws” prohibit most retailers from opening on the holiday.

Sheila Hennessy, area director of mall marketing and business development for Simon Malls, said Auburn Mall in Auburn and Solomon Pond Mall in Marlboro will open at 12:30 a.m. Friday. The Greendale Mall in Worcester will open at 5 a.m. Most retailers in the malls plan to open at those hours because their home offices support it and those who tested early openings last year found it was a good move, she said.

“The college market was really who was out in force between midnight and 2 a.m., and then we saw the retailers offer door-busters at 4 a.m.,” Ms. Hennessy said. “Then we saw another whole group of people out after 4 a.m.”

If a longer Black Friday is poised to give retailers more time, so is the calendar. This year there will be 32 shopping days between Thanksgiving and Christmas, two more than last year and one more full shopping weekend than last year.

Feeding into retailers' expectations is the state and nation's slowly recovering economy. The Mass Insight Consumer Confidence Index, developed by Boston firm Mass Insight, said fourth-quarter consumer confidence in Massachusetts this year has jumped to its highest score since April 2007, before the recent recession.

Analysts say some new products also are likely to excite consumers, including the new Wii U video game system by Nintendo of America Inc. In apparel, falling cotton prices are making clothing retailers merry, said John D. Morris, an analyst with BMO Capital Markets, a Canadian financial services company with offices worldwide.

“What they're not holding onto for better margins overall, they're passing to the consumers in the form of lower pricing or better quality or both,” Mr. Morris said last week in a conference call. Among the companies he covers is TJX Companies of Natick, the operator of T.J. Maxx and Marshalls stores.

One area not expected to do well is toys. BMO analyst Gerrick Johnson said toys launched this season generally were developed 18 to 24 months ago, when economic conditions made toy manufacturers cautious. Toy sales this season could fall 2 percent to 3 percent over last year, he said.

“There are some popular toys out there that sell better than others,” Mr. Johnson said, listing products such as LeapFrog Enterprises Inc.'s LeapPad educational tablet. “But we see no products at this point that would be true must-have toy items, such as the Zhu Zhu Pets were a few years ago.”

To manage the crush of shoppers, retailers are poised to hire seasonal workers. The National Retail Federation estimates employers will put about 585,000 to 625,000 temporary workers on retail payrolls this year, compared to about 607,500 last year.

Expect the customers those workers serve to arrive in stores loaded with smartphones and apps that display store maps, product reviews and comparison prices. Wal-Mart has a mobile app for the iPhone, and Ms. Hennessy of Simon Malls said mall shoppers can expect to see retailers offering promotions tied to QR codes, the black-and-white barcode squares used to share data.

Retailers will find it important to promote their businesses through smartphone apps, said Mr. Hurst of the Retailers Association of Massachusetts, which mostly represents independent retailers.

“The consumer has far more information and more competition and more outlets for buying what they're looking for than they've ever had,” he said. “That's only going to continue. All retailers, big and small, have to recognize that and be a part of that.”